Earlier this month we foreshadowed that the Australian Charities and Not-for-Profits Commission (ACNC) would release the proposed information to be included in the compulsory Annual Information Statement (AIS) under the ACNC Act.
Regardless of size or purpose all charities registered with the ACNC must submit an AIS to the Commissioner each year. The first AIS will need to be completed for the 2012-2013 financial year, and it is proposed that the transitional AIS will require less information than future years.
Transitional 2013 AIS
On 13 March 2013, the Commissioner released a sample copy of the 2013 transitional AIS and a guide to completing the transitional AIS.
No financial information is proposed to be collected in this transitional AIS and it is likely that the most time consuming part of this AIS will be:
- summarising how the charity pursued its charitable purposes in the last financial year (2012-2013);
- describing how the charity will pursue its objectives in the coming financial year; and
- identifying the number of employees and volunteers in the charity.
A finalised version of this form is likely to be made available in May/June 2013, and will be due for lodgement on 31 December 2013 (unless a substituted accounting period has been approved). There will be no public consultation regarding the content of the transitional 2013 AIS.
The ACNC has also released a public consultation paper relating to the 2014 AIS which requires a significant amount of additional information to the 2013 transitional AIS.
It is proposed that the 2014 AIS will:
- require charities to provide both financial and non-financial information (in addition to any financial reporting obligations depending on the size and type of the charity);
- allow for small charities to provide less information than medium and large charities;
- not require basic religious charities to answer financial questions in the 2014 AIS and for future years; and
- require small charities to identify whether they use cash or accrual accounting and provide details of basic financial information.
We note that some charities may have concerns in relation to the proposed 2014 AIS and we recommend that they consider submitting their views before the deadline at 5pm on 26 April 2013.
In particular we flag the following areas that may be contentious:
- the standardisation of financial information for the purposes of public comparison with other charities;
- the requirement to duplicate information already provided in the annual financial report and to identify any reserves held by the charity (for medium and large charities – except basic religious charities);
- the requirement for small charities to provide basic financial information;
- the requirement for all charities to provide information relating to “business activities” undertaken by the charity (which includes activities carried on in the form of a business, trade or regular/continuous grant or lease, licence or interest in property);
- The requirement to provide information about related party transactions which could be particularly onerous in large charitable institutions (such as Church groups) which have many different entities with different ABNs and which have a large number of related party transactions.
If you have any comments or concerns in relation to Annual Information Statements, please contact Bill d’Apice or Anna Lewis.